Wells Fargo Stock Hits 3-Year High After Earnings

At least one analyst hiked its price target in response

Deputy Editor
Jan 14, 2022 at 10:50 AM
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The shares of Wells Fargo & Co (NYSE:WFC) are higher this morning, last seen up 1.6% to trade at $56.96, after the bank concern reported quarterly results -- one of just a few sector giants set to unofficially kick off 2022 earnings. The firm shared fourth-quarter earnings of $1.25 per share on revenue of $20.86 billion, topping analysts' estimates. Wells Fargo chalked its top- and bottom-line beats up to the release of $875 million in loan loss provisions as well as improving loan demand.

On the charts, Wells Fargo stock is trading at its highest level in more than three years. Up 65% in the last 12 months, WFC tested its footing at the $46 area in late December, while the 200-day moving average stepped up as a safety net during the dip. More recently, the security has already added nearly 20% in 2022.

At least one analyst is responding to the results, with Compass Point raising its price target to $64 from $57. This also comes a little over a month after Morgan Stanley named WFC a "top pick." As such, the majority of covering brokerages were bullish coming into today, with 10 recommending a "buy" or better versus two "hold" ratings.

Options traders are targeting the security with enthusiasm today. Already, 54,000 calls and 25,000 puts have crossed the tape, which is five times the intraday average. Most popular by far is the weekly 1/14 58-strike call, where positons are being bought to open, indicating these traders see more upside for Wells Fargo stock by the time today's sessions ends.

An unwinding of this pessimism could have bullish implications for the equity. A boarder look at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows WFC sports a 10-day put/call volume ratio that stands higher than 91% of readings from the past year. In other words, long puts have been more popular of late.

 

 

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